How Founders Can Unlock Their FinTechs In Emerging Markets
Emmanuel Nnaemeka
Emerging markets are posed by economic experts as the future of global prosperity. In this article, I state emerging markets as countries in Africa and the Middle East. Therefore, I focus on how Nigerian founders can unlock their FinTechs across Africa. Read more about FintechIn the last two years, the African FinTech ecosystem has been identified as one of the fastest in the world. According to a report on Finextra, African FinTech broke the $1 billion funding barrier, a feat that the rest of the continent’s tech sector is yet to achieve combined, with $1.6 billion invested across 153 deals in 2021. This growth will continue and the ecosystem will surpass $ 1 billion by end of 2022. Finally, experts have reported that FinTech is flourishing beyond traditional financial centers, and investors are taking notice. But for the pace of investment to continue, structural barriers that limit investor activity in certain regions must be understood, and in some cases, challenged. In this article, I discuss how founders can unlock their FinTechs in emerging markets.
Understand That Growing Trends Emerging Markets
Understanding the growing trends of the emerging markets will help founders change their perception and undertake risks and more risks. In the past six years, Africa has experienced explosive growth in development. According to reports, India, Latin America, and Africa attracted only just 2.4 billion dollars in funding, which was less than 10% of global funding. However, the narrative has changed as the three markets attracted a total of $20 billion in 2021.Sign up for the Connect Nigeria daily newsletterWhat does this tell you? This tells the founder that the FinTech ecosystem is fast becoming very attractive to vendors, hence there is a need to take all the risks possible by trying out new ideas and become innovative-driven. In the past, one would be skeptical about launching a FinTech startup in Africa. However, FinTech apps are fast becoming a household product across Africa. With the availability of historical data, founders can study what works and what does not.
Think Global, But Design Local
FinTech is a global phenomenon, but founders must design their design theirs with their locality in mind. Therefore the use of local language, local wisdom, local habit, local data, and local context must be considered. The big truth about unlocking your FinTech in an emerging market like Africa as a whole and Nigeria, in particular, is that leading venture capital investors often have a light presence in emerging markets but invest their money in startups that are solving local problems. In addition, in emerging markets, the bulk of the work lies with FinTech startups to look at financial constraining problems among the financially included and excluded within their geography and marshal out a solution, which will cause them to attract the attention of VCs themselves.Register to attend the Connect Nigeria Business MixerA recent study has shown that faith in the entrepreneur as an individual and contextual business suitability are the two most decisive factors behind VC investment, and these are both highly contingent on interpersonal relationships and contextual knowledge. Such attributes are difficult to convey in an email or spreadsheet.
Be Data Driven
Data matters when it comes to unlocking your FinTech in an emerging market because the big truth is that investors invest in a vision- but a good vision is also a good roadmap, which is having data that can help in navigating local territories. Furthermore, having sufficient data is necessary for reporting standards, a clear evolution of KPIs whether operational or financial, and actionable scalability plans. Moreover, to attract investors, you need to convince them that a startup’s vision can become a profitable reality. Without data, you will be running a company based on illusion. Unfortunately, investors will see right through it. Featured Image Source: BuildFireGot a suggestion? Contact us: editor@connectnigeria.com
